Clinial innovations - Health Care Innovations for 2007 - Presentation before Comprehensive Health Solutions, Inc, Tuesday, January 23, 2007

A Coffee-Pot Theory of Health Care:
Boil It up from the Bottom Before
Percolating It Down from the Top

This talk will turn 180 degrees away from what other speakers are saying. These speakers are top health care lawyers, officials from the Department of Justice, the Office of Inspector General, the Centers of Medicare and Medicaid, and compliance experts. Other speakers work at the health care summit. I work in the trenches of care. I’m a bottom-up boiler, not a top-down percolator.

Government’s Role

In my view, the government’s should not only rule and regulate. Government should create a nourishing environment for health care innovators. The U.S. government doesn't create the health care economy. Entrepreneurs, innovators, and companies do. For the U.S. economic and physical health, we must balance the energy of entrepreneurs against the stagnation of regulation.

I champion private innovation and entrepreneurship. The U.S. health system’s success, and that of the economy as a whole, depends on vibrant innovation, health care decentralization and creative use of information technologies– not on government regulation. What happens in the field, not what occurs in Washington. D.C., is what matters.

Oh, I know government is the 800 pound gorilla at the Top of the Summit, the King Kong of Payers, and the Sheriff of the System. But government isn’t innovative. It makes the rules, but it doesn’t provide innovative tools.

If you provide care on the ground, innovation is within your control; policy decisions from the top-down aren’t.

One Workable Idea

If you carry away one workable idea from this talk, I will have succeeded, and you may further you success too. Here are four innovation examples.

• Create a Chief Innovation Officer for your organization.
• Delegate a nurse to manage a preventive program for uninsured ER “frequent fliers.”
• Install video and audio bedside modules for homebound patients.
• Organize an innovation team to brainstorm new ventures.

Action This Year

This year Democrats will push universal child coverage, government negotiation of Medicare drug prices, information technology incentives, and policies for covering the uninsured. Republican governors from Massachusetts and California have leaped upon the universal coverage bandwagon.

Not only government is engaged. On January 18, a broad coalition of business and consumer groups, doctors, hospitals, and drug companies unveiled a major proposal to provide health coverage to more than half of the nation’s 47 million uninsured. The coalition proposed expanding federal benefit programs and offering new tax credits to individuals and families.

The proposal, released after more than two years of work, was endorsed by 16 groups including AARP, the American Hospital Association, the American Medical Association, the Blue Cross and Blue Shield Association, Johnson & Johnson, Kaiser Permanente, Pfizer and the Chamber of Commerce of the United States.

“This is a proposal not for mandates but for incentives,” said Dr. Reed V. Tuckson, senior vice president of UnitedHealth Group, one of the nation’s largest insurers. “It’s a careful balance of public and private solutions.”The two key words here are “incentives’ and “balance.”

As we go through our political process, we should heed warnings from Europe. Stephen Pollard, Center for the New Europe Conference, says: “It would be the ultimate irony if the U.S. were to embrace single payer at the very time when Europeans are discovering competition and choice.”

As John Naisbitt points out in new book, Mind Set! in a chapter “Mutually Assured Decline,” Europe beats with two hearts – one offering comprehensive social welfare benefits and the other promising economic supremacy. You cannot have both. These two incompatible hearts, which beat in different rhythms, will likely result in mutually assured economic decline, and turn Europe into a historic theme park for well-off Americans.

My Purpose and Message Today

My purpose today is not so speak of universal coverage but to speak of incremental marketplace innovations you may see in 2007.

I define innovation as doing things better, quicker, differently, and more cost-effectively, even if it disrupts the usual way of doing things.

My message? Innovate and control your destiny, and someone else will.

Start of Road Show

Think of this talk as a road show. The show starts with my article in the August 2006 healthleadersmedia.com. There I described five major new directions for 2006.

1. Information technology tools for consumers to better manage and pay for care.
2. Consumer-driven healthcare.
3. Chronic care management.
4. Public-private partnerships to manage Medicare and Medicaid recipients’ care.
5. Customized ambulatory care centers and retail health chains.

In my healthleaders article, I outlined this consensus for 2006 of top ten innovations among 100 national health care experts whom I polled.

1) Pay-for-performance programs.
2) Introduction of electronic health records into medical practices.
3) Add-ons to EHRs--instant medical histories, coding devices, prescription-enabling modules, or Web sites that permit registration, virtual visits, prescription refills and open-access scheduling.
4) Software facilitating prescribing from office.
5) New practice business models (concierge, cash and retail).
6) High tech/high touch remote patient monitoring with patient interactive capacity.
7) Personal health records with and without EHRs.
8) Disease management programs.
9) Transparency as part of the consumer-driven care movement.
10) Software enabling self-care, self-service and self-empowerment of consumers.

Book

When asked to talk, I was writing the following book.

Innovation-Driven Health Care: 34 Key Concepts for Transformation
Richard L. Reece, MD,
ISBN 10: 0763746819
Price: $64.95 (Suggested US List Price)
Cover: Cloth
Pages: 400
Copyright: 2007
Bartlett and Jones will publish: 03/29/2007

2007 Expectations

From that book and other sources, here’s what I expect in 2007.

• Employer emphasis on HSAs, Consumer-Driven High Deductible Plans, consumerism, and workplace wellness.
• A web-based consumer revolution, Revolutionhealth.com backed by $500 million from Steve Case of AOL fame being a prime example.
• Call for government negotiation of Medicare drug costs and closure of the donut hole.
• Efforts to expand coverage at state and federal levels.
• A gradual policy shift will occur from illness to wellness– with greatest payments still on the disease side of the ledger.

Preventing disease and encouraging wellness is still more talk than action. Diseases are tangible and concrete; wellness is intangible and abstract.

At a more abstract level, we all know, or think we do, what the main lever for change will be – sweeping transparency and accountability reform through local, regional, and national data-sharing. This also is more rhetoric than reality.

Web-Based Innovations

Web-based innovations will flourish in 2007. For one thing, spreading the word by the Web is efficient. The Web lends itself to creativity and standardization across the enterprise and across the nation. For another, computers are becoming ubiquitous.
Web solutions will,

. help patients actively control their health;
• educate patients to understand their condition so they can comply with medical instructions;
• intervene at every medical interaction, communicate, and document exactly what to expect and what to do;
• aggregate and use captured documented exchange data to enhance care, improve outcomes, save time, and reduce risk.

Two countervailing realities, however, keep raising their heads.

• One, consumers lack real-time, relevant, and understandable information to comply with provider instructions or to change behavior.
• Two, many non-preventable diseases – Parkinsonism, Alzheimer's, ALS, MS, and non-smoking related cancers – are beyond consumer power to control.

What I Consider Innovative

What do I consider “innovative”?
• Emmi Solutions, Inc, Chicago, Ill: because it effectively educates patients with a pleasing voice, plain language, and precise illustrations of what to expect from the health system.
• Jewett Orthopedic Clinics, Orlando – because it has decentralized and gone out to patients by setting up seven outlets for minor orthopedic problems.
• MedAI, Inc, Orlando – because it has developed artificial intelligence techniques to help health care organizations make sound business decisions.
• Connextions, Inc, Orlando – because it has effectively used nurse callers and information technologies to manage health consumers in health plans of large corporations.
• Archimedes Project, Kaiser, Oakland, California – because it has used predictive modeling to manage major chronic disease decisions and to run drug clinical trials.
• Pavilion Healthcare, Wilmington, N.C. – because it has reached out to patients by setting up nine multispecialty ambulatory clinics in medically underserved North Carolina.
• Instant Medical History, Columbia, S.C.- because its founder has created easy-to-use software allowing patients to create their medical history before seeing their doctors.
• Bundled Bills, Oklahoma City, OK – because bundled bills combine hospital and physician costs for most hospital procedures and allow consumers to predict in advance what total procedural costs would be.
• SHAPE (Superior Heart and Pulmonary Evaluation), Mayo, Rochester, MN – because its developers modified existing cardiac and pulmonary tests to predict fitness and future chances of hospitalization and death.
• MinuteClinic, Inc, Minneapolis, MN, because it led the charge to bring affordable care for minor procedures in retail outlets.
• Big Boxes, Duluth, MN, and elsewhere – because it shows hospitals and doctors can work together and invest together in large one-stop facilities of benefit to all concerned.
• MedDirect, Inc., Grand Rapids, MI, a web-based company that offers convenient lines of credit and financing for patients and corporations at the point of care.

Five Road Stops

Now let’s visit five stops along the innovation road.

Software City
Consumer City
Chronic Disease City
Retail City
Capital City

Destination One, IT City, Home of Software Developers

1) Emmi Solutions, Chicago, step-by-step, encounter-by-encounter, documented instructions of what’s about to expect and what to do.
2) Artificial intelligence and predictive modeling, MedAI (Orlando) Archimedes (Kaiser), SHAPE (Mayo).
3) “Transparent” health plan websites, e.g. doctors and hospital fees and Rx calculator, Aetna leading charge, United Health and Humana not far behind.
4) You Take Control, Inc, y-t-c.com, a company for consumers to protect sensitive information, Richard Dick, PhD.
5) Hospitals revealing prices in advance. St. Lukes Health System, Kansas City, Missouri,
6) Physician websites for scheduling, Rx refills, email messaging, patient education,
7) Medfusion, Inc., Raleigh, N.C
8) Connextions, Inc., a customer management company, headquartered right here in Orlando.
9) Hospital-physician bundled billing, particularly for elective high-tech procedures, personal experience.
10) Integrated community records aligning 7 hospitals and 4 doctor groups in Northwest and Alaska, PeaceHealth, Bellevue, Wa

Destination Two, Consumer City, Where Consumer Empowerment People Live

1) Health Savings Accounts and High Deductible Health Plans Growth, destined to capture ¼ to ½ of health plan markets by 2011.
2) Employers and their perception that consumer-driven care is only practical alternative short of single payer.
3) Health plans’ positive experiences (so far) with high deductible plans, e.g., Aetna’s report on first 1.6 million since 2001 12% preventive services growth, 70% rollover of unspent funds, cost rise,1% per year for HRA and HSA holders.
4) On economic front, Steve Case’s comprehensive website, Revolutionhealth.com and his acquisition of multiple health companies, backed by $500 million and his support, with intent of “revolutionizing” health care by empowering consumers.
5) On political front, Newt Gingrich, Center for Health Care Transformation, a feeding center of the media.

Destination Three, The Biggest Megapolis of Them All --Where Old Folks and Chronic Disease People Live

1) Aging population, “Demographics is destiny, a future that has already happened”
2) 150 million with chronic disease
3) 70 to 90 percent of present costs
4) Medicaid (53 million) and Medicare (42 million) populations
5) Private-public partnerships to handle problem, American Healthways, Pfizer Health Solutions, Medicaid HMOs with Medicare and Medicaid the prize markets up for grabs.
6) Shift to preventive side of market for the chronically ill -- in Medicare & Medicaid, in health plans, and among employers.

Destination Four, Mall City, Where You Can Get It Retail – and Wholesale

1. Walk-in specialty clinics, e.g. the Jewett Orthopedic Clinics here in greater Orlando area
2. MinuteClinics, acquisition by CVS with 6150 stores, acquisition of Red Clinics by Revolution Health, and other players, with plans for hundreds, probably thousands of retail clinics in Walgreens, Walmarts, and national drug stores, grocery chains, and national discount stores.
3) ProHealth Physicians, Inc., entry by physician into retail clinic market, a signal that doctors are ready and willing to join the competitive fray.
4) Urgent care centers, Urgent Care Association of America, 15,000 strong, expanding and ambitious
5) Onsitedocs.com, Teladoc.com. – doctor-led companies expanding outside physician offices
6) Big Boxes and Big MACCs, with and without hospital ties.
7) “Focused Factories,” Herzlinger, focusing on diseases like diabetes and AIDs, not yet viable because they lose money on sick patients.
8) “In-house clinics” in many national corporations.

Destination Five, Capital City, Where Money Lenders Reside

1) Venture capitalists have gravitated back to health care after physician management firm and dot.com collapses. They recognize health care is economic engine driving most communities, and nation as a whole.
2) Real estate developers and construction firms are providing capital because unprecedented hospital, outpatient, rehab, and other health facilities building boom underway – spurred in part by medical technology wars and by expanding population, 300 million +, 12.3% over 65.
3) Capital needed for large cancer and heart centers with two hospitals collaborating as partners in many communities. 50 heart centers in U.S, at least 5 two-hospital partnerships, Springfield, Ill., Waterbury, CT
4) Capital in the form of lines of credit for patients at the point of care, Meddirect, In, (meddirect.net) in Grand Rapids, MI
5) To repeat, new capital partners, e.g., construction firms and real estate developers, DeWitt Healthcare, Raleigh, N.C,
6) New practices and new startups capital sources, newpracticestartups.com ,primecareamerica.com, Cain brothers, and others.

Things to Watch for on Your Journey

On your journey, watch for:
• New practice vehicles
• Toll booths
• Big Ideas
• Speed Bumps
• Megatrends

As you tool along, watch for these new practice vehicles

1) New practice models, concierge, group visits, cash-only (direct pay) practices, retail clinics, SIMPD.com (Society for Innovative Practice Design) in search of physician satisfaction.
2) Consolidated large practice models – single and multispecialty – in search of infrastructure and efficiency.
3) Integration models based on Mayo model or other forms of integration, Carilion Clinic, Roanoke, in search of cutting cost.
4) Practices centered around Big Boxes, essentia.com, Daniel Zismer, in search hospital-physician joint equity.
5) Big MACCs (Multispecialty Ambulatory Care Centers), in search of new markets and more physician control.
6) Academic-Faculty joint ventures, Beth Israel, Boston, in search of new revenues (125 medical schools).
7) Competing hospital cancer and heart joint venture centers, too costly to go alone, in search of ½ a pie or none at all.
8) Remote care models, home-based, in search of patient independence, better outcomes, few re-admissions.
9) “Integrative” Care Centers, Duke University, and chains of cancer centers, in search of more holistic care and patient satisfaction

Smart Card Tollbooth and Big Ideas

To pass through the tollbooth, just swipe your smart card containing your HSA and personal history,

As you near your final destination, keep these big ideas in mind.

1) Predictive models based on large databases, watch for battles of databases.
2) Decentralization outside of hospitals, off-site ERs and clinics, and often in rehab facilities or home care, doctor-owned ambulatory care.
3) Going where paying consumers work, play, and retire – exurbs and rural areas,” “hit ‘em where they ain’t.”
4) Card-swiping of smart cards containing HSA and personal health information, with prompt payment at the point of care.
5) Aggregation of data to estimate costs of episodes of care, which may vary by factors of 5 to 20.
6) Consolidated consumer databases reflecting “wisdom of crowds,” the google-factor.
7) Consumers as free and willing data entry clerks– examples: ATM, gas stations, super markets, airports, instant medical histories, personal health records, HSA smart cards.

Really Big Ideas

“The Biggie,” Systems Engineering – “Science and process engineering will help bring health care per capita costs down before we reach the breaking point.” George Halvorson, CEO, Kaiser, Personal Communication.

A) SOP Care ( Systematic, Organized, and Purposeful Care) by big organizations (Kaiser, Mayo, VA, other integrated systems, health plans, and big IT companies)

B) SOAPWare for small practices (SOAP stands for Simple Object Access Protocol) , a computer communication platform that might be better called Systematic Organization of Assessments, and Plans (AllScripts, NexGen, GE, SOAPWARE, Inc, eclinicalworks, doctor notes, and 100 other vendors, large and small.

Speed Bumps along the Way

1) Viability and workability of Regional Health Organizations (RHIOs), competitors reluctant to share data.
2) EHRs and PHRs without subsidies, only 15-25 % of doctors now have EHRs, fierce resistance and skepticism by many doctors.
who see nothing to gain by radically changed practice flow and patterns without economic gain.
3) Pay-for-Performance without adequate bonuses, favor large practices, but 80% of docs in small practices.
4) Transparency across the system seems doubtful.
5) Pay-for-Performance as outcome-improving and cost-cutting tool.
6) Regulation reduction or elimination not easy, the Stark truths.
To Stay on the Road
1) Focus on health and consumers.
2) Create new consumer options.
3) Decentralize,
4) Partner with physicians.
5) Ramp up IT.
6) Explore transparency.
7) Seek new capital partners.
8) Combine health-focused with disease-focused care.
9) Innovate: it’s never too late.

Churchillian Conclusions

As Winston Churchill observed:

1) “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries.”

2) “In the end, Americans will always do the right thing, after they have exhausted all the other possibilities.”

The future system will not be perfect but it will be kinetic, free-flowing, and full of winners – and losers.

Next: Because you’ve been so patient slogging through this long blog, I will give you and me a rest for the next three days while I’m in Florida giving this presentation. I will resume blogging with an off-beat piece called “A Limerick Challenge.”